NEW YORK (AdAge.com) -- Twitter put its foot down today with new rules that will substantially curtail third-party networks placing ads in the service, and may put a few out of business.
"We will not allow any third party to inject paid tweets into a timeline on any service that leverages the Twitter API," Twitter Chief Operating Officer Dick Costolo said in a blog post today.
The move, intended to preserve the integrity of the Twitter timeline, will sharply curtail the activities of a number of Twitter ad startups, including Ad.ly, Sponsored Tweets, 140 Proof and Magpie, while giving more prominence to Twitter's own ads, called "Promoted Tweets."
Promoted Tweets, Twitter's version of a search ad, appear at the top of a user's timeline based on "resonance," a metric that includes the number of clicks on an included link or the number of times the tweet has been passed around. Twitter shares revenue with the applications that distribute the ads.
Twitter's Promoted Tweets will be the only sanctioned ad within the Twitter timeline, but the new rules do not ban Twitter users themselves from taking ad dollars in exchange for Twitter posts, such as Kim Kardashian (also an Ad.ly client), who can charge $10,000 to tweet messages to her followers.
As part of the new rules, Twitter clarified that its users own their tweets and are free to do or say what they want with them, including selling them to advertisers.
The new Twitter rules still allow third parties to place ads around Twitter feeds in other applications or next to Twitter search results, but they cannot resemble actual tweets, and there must be clear separation between the timeline and the ads.
The new rules also don't appear to affect those selling ads against Twitter search results, which is the model for TweetUp, a startup founded by search pioneer Bill Gross, and search engines such as Google, Bing and Yahoo, which also index Twitter's real-time results. If Twitter content is the basis of the sale, Twitter requires that you share revenue or license the content for commercial use.
Since Twitter was founded in 2006, a vibrant community of startups has grown up around it, including applications such as TweetDeck and HootSuite that allow users to access the service and businesses to manage Twitter accounts.
While Twitter was building its service, a number of startups started monetizing Twitter. One of the largest and most prominent Twitter ad network, Ad.ly, has signed up more than 70,000 Twitter users hoping to convert their tweet streams into ad revenue, and it just raised a $5 million first round of venture funding.
Contacted by Ad Age, an Ad.ly exec said the company was still trying to assess the impact of Twitter's new policy on their business, and had called an all-company meeting to assess their options.
A Twitter spokeswoman said no startup tapping into Twitter should be surprised by any of the changes. "We don't seek to control what users tweet, and users own their tweets. We aren't going to speculate on the impact this will have," the company said in a statement.
Mr. Costolo cast the switch as an attempt to preserve the integrity of Twitter itself, which he believed would be threatened by third parties serving ads into Twitter streams. He said Twitter itself is responsible for preserving the "enduring value" of the service, and that "third-party ad networks are not necessarily looking to preserve the unique user experience Twitter has created."